Maintaining your investment portfolio is just as important as researching a new opportunity and parting with your hard-earned cash. By maintenance, we mean frequently rebalancing your stocks and shares to reflect your overall aims. When you take the time to do this, you massively increase the likelihood of achieving your desired outcomes.
Balancing an investment portfolio
When you balance a collection of investments, you analyze the likelihood of your portfolio’s risk and return. Typically, rebalancing assets focuses on minimizing risk rather than boosting return.
When you see decent returns, it’s easy to get cocky. This can lead to poor financial decisions, so it’s imperative you stay disciplined. Equally, it’s common for investors to become overly attached to their shares, especially if they’ve done well in the past. This can negatively impact the way an investor analyzes their portfolio.
Let major life events influence the rebalancing of your portfolio
Rebalancing your portfolio is an excellent idea if you’re about to experience a significant change in your life. For example, getting married, buying a house, having a baby, etc.